Official Report: Minutes of Evidence

The Chairperson (Mr Maskey): I welcome Damian Mahon and Lisa Hamilton-Sturdy from the Social Security Agency. You will know that members have previously expressed some concerns about the need to communicate aspects of the Pensions Bill effectively. Gerry McCann offered to arrange this briefing with the Social Security Agency, and we are appreciative that officials are here this morning. They have provided a briefing paper, which is included in members' Pensions Bill folder. The departmental officials who were here last week are in attendance today and have volunteered to address any concerns that the Committee may have following this briefing.

Mr Damian Mahon (Social Security Agency): I thank the Committee for the opportunity to be here today. I am the state pension reforms project manager in the Social Security Agency with responsibilities for introducing the changes resulting from the Northern Ireland Pensions Bill. My colleague, Lisa Hamilton-Sturdy, is the manager responsible for communication and engagement activities associated with the Northern Ireland Pensions Bill. I apologise for the absence of my colleague, Mickey Kelly, who was unable to attend due to other commitments.

I am aware that policy colleagues from the Department have started the process of briefing the Committee on various clauses in the Pensions Bill. It was decided at last week's meeting that officials from the Social Security Agency would brief the Committee specifically about the new state pension and the state pension top-up scheme, which is the new national insurance class 3A contribution.

The state pension system is complex, and we are keen to begin the process of communicating and engaging as quickly as possible without pre-empting the will of the Committee or Assembly. Some information on these changes is already in the public domain through NI Direct and in notifications of state pensions statements, for example. This information, however, is heavily caveated because, although these changes are law in Great Britain, they are not yet law in Northern Ireland until the Northern Ireland Assembly passes the Bill.

We are now just 306 days away from the 12 October 2015, the date the state pension top-up scheme, or the voluntary national insurance class 3A contribution, will be introduced. We are also 483 days from the 6 April 2016, when we envisage the new state pension system will be introduced. For these reasons, we are keen to begin the communication and engagement process with existing and future pensioners. I now pass you over to Lisa, who will take you through our briefing paper.

Ms Lisa Hamilton-Sturdy (Social Security Agency): Thank you for the opportunity to take you through the main themes of the overarching communications plan for state pension reform. As with any Bill of this sort, comprehensive communication and engagement strategies are required to engage successfully with stakeholders, internal and external, and to support the effective delivery of changes to the state pension system in Northern Ireland. It is important to note that this type of activity, comprising traditional communication and marketing, will differ from day-to-day operational notifications, but will also complement this type of communications.

The objectives of our communication activities are to raise awareness and increase understanding of the changes to the system, specifically how they affect current and future pensioners in Northern Ireland from April 2016; to raise awareness of the changes to the state pension statement service; to engage our audience so as to ensure consistent messages regarding changes to the state pension system are communicated to current and future pensioners in Northern Ireland; and to ensure that staff are informed, engaged, and equipped to deal with public inquiries on all aspects of changes to the state pension system. As Damian stated, we are keen to start communicating and engaging as quickly as possible with all our audiences, and to do this effectively we need to take a coordinated approach, which is what we have done.

This morning, I want to provide you with an overview of the communications activities that we are planning as an agency. The purpose of these activities is to ensure that we are successful in communicating the changes. It is important to note that through the delivery of this plan we will continue to work closely with staff at the Department for Work and Pensions (DWP), from both policy and communications teams, to ensure that staff, stakeholders and customers receive timely and accurate messages about the planned changes and that none of our messages contradict those put out by DWP.

The planned activities form part of a comprehensive communication and engagement strategy, which will ensure that current and future pensioners know what to expect and are therefore supported in planning for retirement with all the information they need to make informed choices.

Due to the scale and breadth of the target audiences, it is necessary to segment some of our audiences. The impact of the changes to the state pension system varies considerably depending on the audience. It is therefore going to be necessary to tailor the messages to the audiences with appropriate language, messaging and calls to action. The primary message throughout the campaign is that the state pension is changing from 6 April 2016, making it easier for people to see how much money they will get on retirement and allow them to plan for their future.

That is the primary message but I want to reiterate some supplementary messages, which are also important. Aside from that primary key message, there are a number of key messages to communicate on the changes to the system, not all of which are going to be applicable.

The new state pension from 6 April 2016 will replace the combined basic state pension and additional state pension, making it easier to understand how much pension people will receive on retirement. That means that people will have a clearer idea of how much pension they will receive and, if they want, save in other ways. For example, people might want to contribute to a pension at work or decide to work past state pension age.

Our second key message is that the new state pension applies to only future pensioners. Those reaching state pension age before the introduction of the new state pension on 6 April will remain on the current system. The state pension is not means-tested. If you have a workplace or private pension or savings and investments, you are still eligible for a state pension. Any private arrangements you have will not affect your state pension.

You can claim state pension when you reach state pension age. Your state pension age is determined by your date of birth. To find out a state pension age, members of the public can access the calculator via NI Direct.

The amount of state pension will depend on the audience's national insurance contributions. It is important that our communications carry the message that your national insurance contributions or credits record will continue to fund your new state pension as they do in the current system. Whether you are employed, self-employed, caring or on benefits, it all counts towards your national insurance record.

Our communications will also carry the messages that the new state pension brings self-employed people fully into the state pension system, treating national insurance contributions of the self-employed in the same way as employee contributions for state pension purposes. The number of years of national insurance contributions required for full state pension is increasing from 30 years to 35 years. However, there is a minimum qualifying period of 10 years of national insurance contributions.

National insurance contributions made prior to 6 April 2016 will be recognised in the new system, provided that the minimum qualifying period is satisfied. The new state pension is based on an individual's own national insurance contributions and not on those of their spouse or civil partner.

If you reach state pension age before 6 April 2016, you may be able to add to your additional state pension by purchasing the new voluntary national insurance contributions class 3A, as Damian mentioned.

You will notice from the number of key messages that it is important to segment and tailor them to the applicable audiences. That is what the communication strategy does: it matches the activity to the message to the timeline to make sure that we are getting the right person at the right time and that everybody is getting this crucial information. That is why it needs to be so coordinated and that we work with our colleagues in DWP.

As earlier clarified, the proposed changes to the state pension are a matter of interest to many different people and we will be communicating with a variety of sectors. To date, engagement with people externally has been very limited and will remain so until the Northern Ireland Bill has reached an appropriate stage in its legislative passage. Until then, we have our plan sitting waiting to make sure that we are ready if and when the time comes to start communicating. As Damian said, information on the proposed changes has been made available, so far, on NI Direct but it is heavily caveated to reflect the fact that the Pensions Bill is progressing on its legislative path.

Once the views of the Northern Ireland Assembly and the Committee are clear, we will step up the external communications. It is also planned to make further information available on NI Direct at that time, and remove any caveats.

As part of our strategy, we intend to create an external stakeholder forum or customer representative group. Sessions with those groups will be used to inform members on expected changes to the state pension system, to gather knowledge on the best channel mix to target audiences and any other applicable feedback. So, in other words, we will speak to our stakeholders on a regular basis and make sure that they are telling us the way tin which they want to receive the messages. We will not just push it out and hope that it gets to the right people.

As part of our strategy, we also intend to run an awareness campaign, which will include advertising, PR and internal communications. The internal communications will support any of the external messaging so that our staff are well aware of the changes and are able to support the messages that we put out through traditional PR channels and advertising.

At the stage when we run our awareness campaign, we also plan to run a multi-channel advertising campaign to complement DWP's campaign. That may include television, radio, online, outdoor and print advertising. The main call to action for any such advertising campaign will be to access further information on NI Direct, so it is really important that all the key messages that I have taken you through are on NI Direct. That will mean that all the detail is there for anybody who wants to access it.

The key messages for the future advertising campaign is that the state pension is changing from 6 April 2016; it will apply only to future pensioners; and the introduction of the new state pension is about making it easier for you to understand at a much younger age how much you will receive on retirement so that you can better plan for the future. The advertising camping will stick to those three messages so that it is clear and simple. Individuals can then assess their own situations and access the information on NI Direct or get the relevant marketing materials that they need.

The type of activities that we hope to use in the agency and see in the campaign are as follows: media activity; the production of marketing collateral; cross-departmental working; exhibits; the use of appropriate publications for the right audiences; traditional advertising; the production of briefing packs; using our improving benefit uptake roadshows to make sure that our outreach officers are armed with the information, carrying messaging on pay slips so that, when people get their pay, there is a message along the bottom to inform them that the system is changing; and social media The roll out of the plan will probably last approximately one and half years and will be timed appropriately.

Throughout the roll out of the campaign, we will continually monitor and evaluate it to ensure that it is successful. As I said, it will not just be a case of hoping that the messages are getting to the right people; we will make sure that we get the relevant media coverage, the relevant online hits on NI Direct and have good engagement at the customer representative groups.

Of course, as mentioned earlier, we are working closely with DWP. It will be really helpful and crucial for us to take up any learning that they have gathered through their communications. Alongside that, we will use our own continuous research to inform our plans.

I hope that what I have said has gone some way to explaining what we have planned in communications, marketing and engagement. Damian and I are obviously available to answer any questions.

The Chairperson (Mr Maskey): OK, thank you, Lisa. Before I open the meeting to members, I have two questions.

Damian, last week, we heard some criticism of the NI Direct pensions calculator system. I know that you touched on that, but can we get some assurance that that tool will be easy to access and accurate when people access it?

Lisa, one of your final points was about a parallel or underpinning message to encourage people to prepare for future personal pensions, even though there are a lot of issues about low pay and all the rest of it which nearly makes it impossible for people to do that. If people can prepare, will there be an underpinning message to encourage them to take up other pension provision if they can do so?

Mr Mahon: I was at the session last week. I went back to the office to check the calculator, because I have used it on a number of occasions. The calculator is quite simple to use. Once you access it through NI Direct, it takes you through an automatic URL link to www.gov.uk. It is a simple process of putting in an additional amount of money that you would like to get on top of your pension — for example, £10. You put in that amount and press a button to start the calculation and it breaks down the additional state pension contributions. It is really two screens and is not very complicated.

The www.gov.uk website updates the calculator with the information that is on the screen. It does not give the detail about how much of it is accurate. It is about the quality of the screens and their look and feel.

The Chairperson (Mr Maskey): OK. That is helpful. Thank you for that. What about the message about preparing for pensions if people can do so?

Ms Hamilton-Sturdy: Absolutely. Our main key message is to let people know that the system is changing. However, the supplementary key message is that no matter what your personal situation is, we want to make sure that the information is there for you to make as an informed choice as possible and know what your options are.

We will tell people how to find out how much money they will get on retirement, and they can then make their future decisions based on that amount of money. That may include whether they will choose to work past the state pension age, make voluntary contributions or do something privately. It is really about bringing all that information together. That will be a very important supplementary key message for us.

Mr Brady: Thanks for the presentation. You have given a fairly comprehensive overview of the communications. I suppose there are two points, and one follows on from what the Chair said. One of the major changes is that people will be able to claim only on their own contributions, so that will exclude spouses, partners and people who have been unable to work. That is one issue.

The other issue is about planning for the future. I attended a briefing by the Trussell Trust, which runs food banks and intends to open a lot more in the North. Quite a proportion of the people who use food banks are working. They cannot prepare for the future because they can barely afford to live in the present. They are contributing to the system, but, ultimately ,when they reach pension age, they will probably not have been able to provide for the future through savings. Recent reports also indicate that the disposable income per household in Britain is approximately twice as much as here, so, again, we have particular circumstances here.

How will that message go out? With the demise of pension credit, which supplements income, I am not sure how the message will resonate with people who really find it difficult to cope on a daily basis. Those people are working, and are the so-called working poor. I think you will have difficulty with that message. There is also the fact that people cannot claim on their spouse's or partner's contributions. That is a major challenge, and I think you will have some difficulty in getting that message out.

Ms Hamilton-Sturdy: Thanks, Mickey. I think that an important part of what you said is that we should make sure that we are involving, speaking and engaging with all types of stakeholder groups. That includes voluntary sector organisations, people who work with vulnerable adults and, as you said, people who may be classed as working poor. It is very important to me, and to us, that throughout this strategy we make sure that we involve everybody in our communications. That will mean that people can try as best they can, given the context they are in, to make the best decision for them and have the support of the organisations we have contacted them through.

Mr Wilson: Can I just go back to one of the points that the Chairman raised? I know that we have to take some of the stuff that we heard last week with a pinch of salt, because the trade unions were along for a general whinge about the Pensions Bill anyway. However, I get concerned sometimes about the way in which we think that we get information to people. It is fine if you are using the technology every day, but that is not the case if you are using it on a one-off basis and are not familiar with some of it. The unions raised the issue of the calculator and how people will be able to work out what the implications are for them.

Damian, you say that you went back and worked through it, which is fine. Has there been any testing of the calculator by one-off, casual users of the system? You might be confident with it because you are familiar with the whole system, but is it as friendly and accessible for the casual user as you say?

Mr Mahon: No, we have not, but in early 2015 we plan to do some customer insight and research with future pensioners in conjunction with colleagues from DWP. The scope of that is yet to be agreed. One of the things we plan to do is look at some of the tools that we have on the NI Direct website for calculators and the state pension statement service and then select individuals off the street, take them through that process and get some feedback from them.

Mr Wilson: When are you going to do that?

Mr Mahon: Either the end of January or the beginning of February 2015.

Mr Wilson: That is a good idea, because it tests it with the people who are not familiar with it.

Mr Mahon: We will then have the opportunity to feed the results back into the programme in DWP.

I probably should have said that, as well as the calculator, we have a fact sheet on nidirect.gov.uk, which lists an individual's age and the amount of money that they are likely to get. So, you can access that instead of using the calculator and physically putting a date in.

Mr Wilson: Lisa, you mentioned that, to try to get an idea of what you needed to do to promote the message, you would be talking to the external stakeholders and creating that external stakeholder forum. How will you go about choosing who you want on that forum? How will those who believe they should have an input be included in the forum?

Ms Hamilton-Sturdy: We have broken up our stakeholders into two tiers, Sammy. There is a wide breadth of the organisations that you would expect to see, including Advice NI, Age NI, Age Sector Platform, Carers NI, church leaders and faith organisations, Citizens Advice, the Commissioner for Older People and the Consumer Council. I will not go through them all, but we have made sure that all of the representative groups are involved. That provides a good platform for what you were saying to Damian about the calculator, because, if there are people having difficulties with the calculator and are finding that it is not user-friendly, we can continue to amend products. So, that customer-representative group engagement will be crucial for us to make sure that we are getting the right people at the right time.

Mr Wilson: OK. So, the membership is really taken from the list of existing organisations, and, if there are others who wish to be involved, there will be a mechanism by which they can be included.

Ms Hamilton-Sturdy: Absolutely.

Mr Wilson: With your future advertising campaign, you have indicated that it is about getting the high-level message over — the three key points — after which people will be directed towards where they can get more detail. Will that be mostly conducted through websites? You mentioned a message on payslips and social media, but I take it that that will be the high-level message. Once you get the general principles out of the way, people want to know how it affects them. How will the follow-up work be done?

Ms Hamilton-Sturdy: As you said, we will have a lot of the information online, bearing in mind that not everybody uses online channels to communicate. So, we will make sure that those stakeholder organisations that I talked about have briefing packs and fact sheets and that the jobs and benefits offices have briefing packs and fact sheets. So, there will be marketing collateral produced to support whatever is on the NI Direct website. Any traditional PR, such as news coverage, will have as many of the key messages that we can get in. So, we are basically just using any channel that we can to get those messages out there.

Our stakeholder groups and the customer-representative group will also play a crucial role, because we will be giving them the marketing materials to take back to their own organisations and share with the people with whom they engage.

Mr Wilson: I cannot remember where we got the information from, but it was on the changes in welfare. The indications were that once you got to people aged over 45, most people, a bit like me, did not tend to use electronic methods of getting information.

On the issue of leaflets, a lot of this is fairly technical and complicated, but I take that before you print anything out, you will be doing what we suggested to Damian; namely testing it out on the people who will have to use it so that it is not in civil service lingo and is in a language that people understand.

Ms Hamilton-Sturdy: Absolutely, Sammy. It will be accessible and easy to understand. We will be sharing it with the relevant people to make sure that the message is clear. We will also be sharing information among constituency offices to make sure that you have the information you need for constituents. So, we will be using all the traditional methods as well.

Mrs D Kelly: Thank you for your presentation. How are you going to target self-employed persons specifically and give them the information they need? In relation to those employers and employees who have opted to contract out of National Insurance, how are you going to get the message across to them and make it clear what their options are?

Ms Hamilton-Sturdy: Thanks, Dolores. On the self-employed, we have an advertising campaign planned, and that will include billboards, bus-side advertisements, if appropriate, and television and radio ads. So, I would like to think that, with a far-reaching campaign like that, when you are self-employed and hear that there are changes to the pension system, you will follow the call to action and will find out how that affects you. Sorry, what was other question?

Mrs D Kelly: Given that the majority of self-employed people have to employ accountants, which is a discrete group of professionals, to do their tax returns, have you thought about specifically communicating with accountancy firms?

The other point was about those who opted to contract out but will no longer be able to do so. How will you advise them? Will there be advice clinics, for example, for some people in some big employers where both employer and employee have opted to contract-out?

Ms Hamilton-Sturdy: You have made a very valid suggestion. Through our stakeholder engagement, we will have a range of private sector organisations involved too and will work with the financial institutions to ensure that they have all of our printed materials. So, we will work with all of the relevant private sector institutions and maybe some chartered institutes to make sure that they have information. Then, those individuals will see it through that channel, whether it is online, the advertising campaign, their bank or their chartered institute, and come to us for more information. As the need arises, we will cope with it. If a large volume of a particular group of people come to us, or a volume for that matter, and we see the need to engage further with a particular group, we definitely will. Due to the length of the campaign — a year and a half — we will be able to continually adjust and make sure that our activity matches the group.

Mr Mahon: This is a joint programme in Great Britain between DWP and HM Revenue and Customs (HMRC). Both Departments, particularly HMRC, which is a UK-wide Department, have issued a raft of communications on National Insurance contributions and the end of them being contracted out and the impact that will have on certain groups. That information is also on their website.

Mrs D Kelly: There is reference to people who have had to opt out because of caring responsibilities, whether that is caring for a person who is ill or disabled or for children. Is there any scope for the Social Security Agency, which pays carer's allowance, to advise people that they can purchase additional National Insurance contributions? That is the idea behind it.

Ms Hamilton-Sturdy: Absolutely.

Mr F McCann: How much of a budget is attached to the roll-out of this?

Ms Hamilton-Sturdy: Fra, there is a communications team in the Social Security Agency, so we have a resource in place for agency communications. Staff are able to carry out that activity, and I am a member of that team. Obviously, the planned media buying of advertising space will cost money, and we will be doing that in the most cost-effective way possible. The budget for that has not been agreed yet, but for the traditional activity that I talk about — the traditional PR — we will use our Department's press office to pump out a lot of those messages. We will run the stakeholder engagement groups ourselves within the agency. Therefore, the cost attached will be the bought media.

Mr F McCann: Sammy talked about the over-45s, people who may not be computer literate and those who may rely on going to the local corner advice centre or wherever to glean information and seek advice. Are you looking at bringing in organisations like the independent advice sector, Citizens Advice and people who have a complete network of advice centres and contacts within communities or the voluntary sector to deal with things like that? In the past, when many of those organisations dealt with social security issues and tried to get the message out, they were fairly effective in getting that message out, and they were able to simplify the thing, rather than having what somebody called the gobbledygook of government, so that people could understand it better.

Ms Hamilton-Sturdy: Absolutely, Fra, we will include most of the groups that you mentioned on our customer representative group, and we will provide them with briefing packs so that they can take them back to their local advice offices and leave them sitting out or do whatever they feel would make the best and most effective use of them.

Mr Allister: I am thinking mostly about the self-employed. You mentioned HMRC. Will the local agency be able to influence and impact what it does, or will it be operating in its own right?

Ms Hamilton-Sturdy: No. As we talked about, we are working alongside DWP and making sure that our activity is complementing its activity. We will do the same with HMRC. Therefore, we will make sure that both agencies are speaking to each other and that our messages are aligned and not contradictory.

Mr Allister: The one document that every self-employed person has to engage with is their tax return. No doubt, when that comes out, sending out suitable flyers with it would be an appropriate means. Will that be done?

Mr Mahon: I am not aware that that is the case. Like Lisa, I am part of the joint DWP programme, so I can raise that issue at the next meeting to see whether there are any plans to issue anything with the self-assessment returns.

The Chairperson (Mr Maskey): I thought you said a minute ago that HMRC would be disseminating the information.

Mr Mahon: It does issue some information, but I am not sure whether it has specific information with the self-assessment forms.

Mr Campbell: Sorry for being late. Paula and I suffer from the disadvantage of being on the Assembly and Executive Review Committee, which also met at 9.30 am, so that is why I am late.

Mr Allister: It was a long meeting today.

Mr Campbell: It was a longer meeting than usual.

On the issue of National Insurance contributions, I see that the number of years required for full state pension is going up from 30 to 35. We are told that the minimum qualifying period is 10 years. Is that the same as it has always been? Does the minimum qualifying period remain at 10 years, or has it changed?

Mr Mahon: Under the old rules, or the existing state pension system, there was no minimum qualifying period.

Mr Campbell: There was no minimum qualifying period. Right. Then it will be critical for people who have just short of 10 years. Obviously, people will have different circumstances, and some may not be able to afford to purchase the additional contributions. However, how are you going to target those who are not aware that they are short of a qualifying period that previously did not exist?

Mr Mahon: There have been discussions within the DWP programme regarding drafting a minimum qualifying period letter that would be issued to people when they claim state pension. No decision has been taken on that. They are looking at the cost of doing that and being able to identify customers.

Mr Campbell: I do not know how many people that will affect, but the number may be disproportionately female: women who would have taken time out from the workplace for family considerations or whatever. A number of people may have eight or nine years' contributions and who, for a relatively small amount of money, could breach the threshold, which would be quite beneficial for them over a much longer time. However, they may not be aware that they are a minimal amount short of qualifying for a pension.

Ms Hamilton-Sturdy: I think, Gregory, that is an important point that we will be pulling out: previously there was no minimum qualifying period, so please go and check for how long you have been contributing.

I stated at the beginning that we would have a primary key message and there would be 10 or 12 supplementary key messages. The number of years that your National Insurance contributions are required is one of those key messages. That is one that we will concentrate on through various activities. Your point is valid, and we should make that message as public as we can when we are communicating.

Mr Campbell: For somebody in that category of eight or nine years but short of 10, once they become aware that they are just short of the qualifying period, their circumstances may not permit them immediately to purchase the difference. Is there a period of grace whereby they will be allowed to make those additional contributions?

Ms Hamilton-Sturdy: Gregory, I would have to defer to our policy colleagues on that. Unfortunately, I am not aware of the answer to that.

Mr Campbell: Could somebody come back to us and let us know?

The Chairperson (Mr Maskey): We have officials here, Gregory, and we can get that response from them.

Mr Campbell: OK.

The Chairperson (Mr Maskey): No other member is indicating that they have further questions.

A key message coming from the Committee is that this is all about the dissemination of information. Obviously, you garner the information required for the messaging. A lot of that was in your presentation and will be extended to your stakeholder engagements that you referred to, which will be quite comprehensive.

It is then about disseminating all that information, whether via a direct link with HMRC, the Social Security Agency itself, or stakeholder networks, which Fra and others alluded to and which are important networks in themselves. For me, it goes to the basics. When we talk about NI Direct, people in this room might know what NI Direct is, but I am not so sure that many members of the public know what it is. I would never think of ringing NI Direct; I would go to Mickey Brady or somebody else. Somebody around the table said that people go to the local advice centre or somebody they can rely on. The impersonal nature of NI Direct could, in itself, be a barrier, so we will have to work to make sure that in that 18-month or whatever time frame you mentioned a lot of information needs to be got out there to underpin the key points. You heard that from members. I am just trying to encapsulate that in a wee summary.

Damian and Lisa, are you happy enough with what you have presented this morning? You dealt with some of the questions and are taking away some messages about further delivery. No doubt, we will speak to you again in the near future. Thank you very much.

Ms Hamilton-Sturdy: Thank you.

The Chairperson (Mr Maskey): It has been very helpful. Thank you.